Why Would 29% of SMBs Say They’re Not Using Digital Marketing This Year?
March 14, 2019 | Contributed by: Joe Morsello
Challenges of time and budget have been consistent themes for small business owners (SMBs) in executing online marketing. Even as many SMBs have become much more sophisticated about digital, there are SMB segments that feel frustrated, even overwhelmed by some of the challenges.
LSA has found this anecdotally among attendees to its digital marketing bootcamps. And these are SMBs highly motivated to improve their marketing performance.
According to a recent study from Infusionsoft, 29% of small business survey respondents do not have plans to utilize digital marketing in 2019 — almost one in three. This, despite all the evidence that at least half of all offline purchases and services are influenced by the Internet.
There could be multiple reasons, both positive and negative, for the finding. Marketing is seen by some SMBs as discretionary vs. other expenses. It could also be that some of these respondents have “enough business.” But it’s probably not a statement of ignorance about the relevance of digital.
Agencies, technology providers and others seeking to acquire small business customers should seek to understand what’s behind the 29% finding, assuming it can be generalized to the larger SMB population.
As a basic matter, there are a number of challenges that make digital marketing difficult to execute. From understanding how to use sometimes technical platforms, to identifying the tools that are right for a particular business, digital marketing isn’t simple (we’ll see what AI brings). That’s why agencies and local media providers exist in part.
The survey found that 22% of SMBs had trouble finding time and resources to effectively promote their businesses. As an example, I recently had a conversation with a small business owner who was very effective marketing his business. Fast forward 10 months, his efforts were resulting in more work which meant less time for marketing. So even if an SMB is an effective DIY marketer, this can be difficult to sustain over time, which is somewhat ironic. His marketing was successful, leaving less time for marketing.
The industry’s chronic SMB churn problems may also be a part of the 29% finding. Overpromising results that then don’t materialize has been a historical problem. But when it comes to proving ROI, even sophisticated enterprise marketers have trouble making sense of data and determining which channels actually performed.
Conversely, there are SMBs that don’t want to grow beyond a certain point, which may create operational challenges (e.g., hiring, fulfillment). Some SMBs are “lifestyle businesses.” For many of these owners, business in a relatively good economy may be good enough.
Many SMBs also feel their best lead source is word of mouth and that may be working for them. And they may not recognize the importance of other forms of marketing to sustain current business levels or generate awareness among potential customers for future sales.
Marketing and sales are also seen as distinct by SMBs. So, while SMBs need and want sales, they may not see online marketing is a critical sales driver, especially if they’ve got a strong referral network.
The key for agencies and technology providers is to understand the segments they’re targeting and their mindsets. There may still be a need for some SMB education but there may also be a need to diversify product offerings to solve a broader array of problems (e.g., customer engagement and loyalty vs. pure lead gen).
Marketers should be trying to solve problems for small businesses owners in addition to selling products and reaching revenue targets. This may require new thinking, new solutions and new tactics. But in the end demonstrating real value is the key to winning over these hesitant SMBs.